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> There's no reason the government couldn't just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong. That

by 0x457 4y ago

> There's no reason the government couldn't just tell me how much money they took each year and give me a chance to contest it if I thought it was wrong. That's not how it works, though. You're telling the government how much you own and how much you paid. They do have a good estimate, and often that estimate is probably correct. However, there are cases when that estimate isn't correct.

forrestthewoods 4y ago
Government: You owe us money. It’s called taxes. Me: How much do I owe? Gov’t: You have to figure that out. Me: I just pay what I want? Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too. Me: What if I get it wrong? Gov’t: You go to prison
- bergenty 4y ago
  I think the difference is they don’t know until they have tax auditors on the ground at your location tallying it all up.
  - alistairSH 4y ago
    For the majority of Americans, they know… Most Americans don’t have passive income streams or investment income. Most Americans, for a given year, don’t have a change in living scenario (marriage, kids, etc). The majority of tax filers take the standard deduction.
  - sgc 4y ago
    Not always. I used taxAct last year to file, as I always do. I paid what I was told I owe by the software. I just received a tax refund in the mail. Just a check with a memo reading "tax refund", no explanation. Further, that would be true anywhere, since no system is immune to tax fraud or improper communication.
  - pclmulqdq 4y ago
    There are lots of warnings before you get audited. You usually get several letters and then are told "preserve your documents, we may be coming." Then they send you an email or give you a phone call. Then, if you don't respond, they show up irate at your door.
- SoftTalker 4y ago
  Nobody goes to prison over tax errors unless it's deliberate fraud.
  - forrestthewoods 4y ago
    Oh you sweet summer child. How I wish that were true. People hate the police but for some reason think ladder climbing IRS agents are fair and rational. They aren’t. They’re bloodthirsty thugs who will make your life a living hell. If you don’t believe that to be true then consider yourself very, very fortunate.
    - colinmhayes 4y ago
      and how many bloodthirsty IRS agents have you had the pleasure of dealing with?
      - forrestthewoods 4y ago
        More than zero
    - themaninthedark 4y ago
      Story Time: I used a CPA to generate do my taxes a couple times, not because I have a whole bunch of money or complicated stuff but because I was overseas a couple years then came back and bought a house. First time it was great, the second(and last)time they screwed up. Badly. My wife is a foreign national, not a US citizen and no plans to be one. At the time she did not have SSN. For the first filing, the CPA put her down and did not put down a SSN. The last time they put down a SSN, a random one from someone in NJ(How do I know this, my state revenue gave me all the persons details when I contacted them. Yes, that incompetent), I live in the south. I noticed the issue when I was reviewing my paperwork after I got it back. Since I was filing via post, I crossed out the wrong number and wrote in a note. 3 weeks later I get a check from the state issued to my wife and I, listing the incorrect SSN for her. I call them up and spend several hours trying to contact them(call and no answer, call an hour before close and get closed message, call 30 minutes after open and get closed message) and then a couple hours on the phone where they admit that the paper work was corrected, they see that I corrected and then they want and used the wrong data anyway because...stupidity or something. The solution is to send the check back to one address and resubmit paperwork to another address. The IRS has not yet issued me anything, I call them to alert them of the issue and make sure I don't have to go through the same deal. I call and get through on the first try, I inform the agent of what happened and what I did to the paperwork. They pulled up a scan and told me they saw what I was talking about, that it would be no issue and I could relax and have a great day and recommended I don't use that CPA again in the future. For all the hate and horror I hear about the IRS, I don't see anyone substantiate it. All this going on about bloodthirsty thugs just seems to be trying to "other" a group of people. Maybe another story is appropriate here too: I have two brothers who just imported a small gas powered excavator from China bought off of Alibaba. In order to import such equipment, the engine must be certified for use in the US by the EPA. The document filing is rather strict, not good faith and refile + pay interest like how the IRS works. $15,000 in penalties and possible jail time if you make a mistake kinda strict. I told them they needed to make sure the equipment was cleared for import as I have to work with the EPA on emissions certification sometimes. The manufacturer assured them it was, they paid the down payment and wait for it to arrive. 3 days before the ship docks, they get a call from the cargo broker asking them for the EPA documentation. If they can't provide it by the time the ship docks, choices are: Get documents showing engine is certified, send to Customs bonded warehouse(high cost per day) and possibly rework/remove engine or abandon/dispose of cargo. In attempting to get the certificate from the manufacturer, they contacted the EPA several times to make sure the information they were getting would match what was required. The older brother did the initial calling of the EPA. OB: "Fucking EPA, they are trying to get me to make a mistake so they can screw me over and fine me" The younger brother then called the EPA to get a better understanding and clarify what was relayed to him by the older. B: "The EPA isn't to bad, you ask them questions nicely and they respond. They even gave me some good advice on where I might be able to find some of the documents." The only difference between the two is how they approached the government agent and their attitude and manner of asking questions. My advice, if it seems like there are a bunch of people trying to screw you over using regulations, it might be the manner and way you are approaching the situation.
jedberg 4y ago
If you don't file your tax return, the government will calculate it for you, send you a bill and a document showing how they got there, as well as a list of all the forms they have, and then you either agree with them and pay, or contest it by filing your return. If all your income is from a job or investments that have a 1099 and you only take the standard deduction, the government already knows exactly what you owe. The only thing they don't know is business income/loss and donations. For most taxpayers the government could calculate your tax bill without any involvement from you.
guerrilla 4y ago
> That's not how it works, though. Yeah, they're saying that it should work thatvway though, like it already does in Japan, Sweden and many other countriea
Broken_Hippo 4y ago
However, there are cases when that estimate isn't correct. Which isn't actually an issue. I moved from the US to Norway some years ago. Once a year, the government sends a letter (to a secure digital mailbox) and has me go online to check my tax return. If I do nothing, they'll just send me any refund I'm owed (or expect my payment by the due date). If there is an error of any sort or I need to do something to it, I have that option. Many if not most people don't need to do anything, which saves money since there are less tax returns for humans to deal with. I'm guessing there are more resources available for other types collection efforts.
- Thlom 4y ago
  Banks are obligated to report the holdings you own, brokers are obligated to report both what you own and any gains/losses you have endured over the year, land and home ownership is also reported, many deductibles are reported (f.ex. daycare is a deductible and that is automatically reported). Basically most things are reported automatically and if there's anything else, like a long commute (which for some unknown reason is deductible), there is a simple form on the web site you can fill.
  - iopq 4y ago
    But things like sales of crypto, overaseas earnings, business expenses, etc are not reported automatically Although I agree that the IRS can make a guess, I'd rather just change it to a system without so many damn details
    - toomuchtodo 4y ago
      Details aren't going away because tax policy is used to incentivize or disincentivize activities. Mandate reporting for what you can, provide an exception process when that isn't feasible. A majority of citizens can have their taxes done for them by the IRS, so do so.
    - godelski 4y ago
      > crypto Most people trade through brokers like Coinbase, which does report > overseas earnings I don't think this applies to the VAST majority people > business expenses Also doesn't apply to the vast majority of people.
godelski 4y ago
> However, there are cases when that estimate isn't correct. So I have a few important questions then: - How large is the error? - Can errors be solved by saying "confirm and if we find out you lied you'll pay a fine"? - Is the error homogeneous or worse for certain groups/classes? - Is the error less than the cost and loss of productivity that Americans face in filing taxes? - If it is non-homogeneous, then can we do return free filing for the majority of the population? - Why can other countries successfully perform this but we can't?

by 0x457 4y ago

forrestthewoods 4y ago

Government: You owe us money. It’s called taxes. Me: How much do I owe? Gov’t: You have to figure that out. Me: I just pay what I want? Gov’t: Oh, no we know exactly how much you owe. But you have to guess that number too. Me: What if I get it wrong? Gov’t: You go to prison

bergenty 4y ago
I think the difference is they don’t know until they have tax auditors on the ground at your location tallying it all up.
- alistairSH 4y ago
  For the majority of Americans, they know… Most Americans don’t have passive income streams or investment income. Most Americans, for a given year, don’t have a change in living scenario (marriage, kids, etc). The majority of tax filers take the standard deduction.
- sgc 4y ago
  Not always. I used taxAct last year to file, as I always do. I paid what I was told I owe by the software. I just received a tax refund in the mail. Just a check with a memo reading "tax refund", no explanation. Further, that would be true anywhere, since no system is immune to tax fraud or improper communication.
- pclmulqdq 4y ago
  There are lots of warnings before you get audited. You usually get several letters and then are told "preserve your documents, we may be coming." Then they send you an email or give you a phone call. Then, if you don't respond, they show up irate at your door.
SoftTalker 4y ago
Nobody goes to prison over tax errors unless it's deliberate fraud.
- forrestthewoods 4y ago
  Oh you sweet summer child. How I wish that were true. People hate the police but for some reason think ladder climbing IRS agents are fair and rational. They aren’t. They’re bloodthirsty thugs who will make your life a living hell. If you don’t believe that to be true then consider yourself very, very fortunate.
  - colinmhayes 4y ago
    and how many bloodthirsty IRS agents have you had the pleasure of dealing with?
    - forrestthewoods 4y ago
      More than zero
  - themaninthedark 4y ago
    Story Time: I used a CPA to generate do my taxes a couple times, not because I have a whole bunch of money or complicated stuff but because I was overseas a couple years then came back and bought a house. First time it was great, the second(and last)time they screwed up. Badly. My wife is a foreign national, not a US citizen and no plans to be one. At the time she did not have SSN. For the first filing, the CPA put her down and did not put down a SSN. The last time they put down a SSN, a random one from someone in NJ(How do I know this, my state revenue gave me all the persons details when I contacted them. Yes, that incompetent), I live in the south. I noticed the issue when I was reviewing my paperwork after I got it back. Since I was filing via post, I crossed out the wrong number and wrote in a note. 3 weeks later I get a check from the state issued to my wife and I, listing the incorrect SSN for her. I call them up and spend several hours trying to contact them(call and no answer, call an hour before close and get closed message, call 30 minutes after open and get closed message) and then a couple hours on the phone where they admit that the paper work was corrected, they see that I corrected and then they want and used the wrong data anyway because...stupidity or something. The solution is to send the check back to one address and resubmit paperwork to another address. The IRS has not yet issued me anything, I call them to alert them of the issue and make sure I don't have to go through the same deal. I call and get through on the first try, I inform the agent of what happened and what I did to the paperwork. They pulled up a scan and told me they saw what I was talking about, that it would be no issue and I could relax and have a great day and recommended I don't use that CPA again in the future. For all the hate and horror I hear about the IRS, I don't see anyone substantiate it. All this going on about bloodthirsty thugs just seems to be trying to "other" a group of people. Maybe another story is appropriate here too: I have two brothers who just imported a small gas powered excavator from China bought off of Alibaba. In order to import such equipment, the engine must be certified for use in the US by the EPA. The document filing is rather strict, not good faith and refile + pay interest like how the IRS works. $15,000 in penalties and possible jail time if you make a mistake kinda strict. I told them they needed to make sure the equipment was cleared for import as I have to work with the EPA on emissions certification sometimes. The manufacturer assured them it was, they paid the down payment and wait for it to arrive. 3 days before the ship docks, they get a call from the cargo broker asking them for the EPA documentation. If they can't provide it by the time the ship docks, choices are: Get documents showing engine is certified, send to Customs bonded warehouse(high cost per day) and possibly rework/remove engine or abandon/dispose of cargo. In attempting to get the certificate from the manufacturer, they contacted the EPA several times to make sure the information they were getting would match what was required. The older brother did the initial calling of the EPA. OB: "Fucking EPA, they are trying to get me to make a mistake so they can screw me over and fine me" The younger brother then called the EPA to get a better understanding and clarify what was relayed to him by the older. B: "The EPA isn't to bad, you ask them questions nicely and they respond. They even gave me some good advice on where I might be able to find some of the documents." The only difference between the two is how they approached the government agent and their attitude and manner of asking questions. My advice, if it seems like there are a bunch of people trying to screw you over using regulations, it might be the manner and way you are approaching the situation.

jedberg 4y ago

If you don't file your tax return, the government will calculate it for you, send you a bill and a document showing how they got there, as well as a list of all the forms they have, and then you either agree with them and pay, or contest it by filing your return. If all your income is from a job or investments that have a 1099 and you only take the standard deduction, the government already knows exactly what you owe. The only thing they don't know is business income/loss and donations. For most taxpayers the government could calculate your tax bill without any involvement from you.

guerrilla 4y ago

> That's not how it works, though. Yeah, they're saying that it should work thatvway though, like it already does in Japan, Sweden and many other countriea

Broken_Hippo 4y ago

However, there are cases when that estimate isn't correct. Which isn't actually an issue. I moved from the US to Norway some years ago. Once a year, the government sends a letter (to a secure digital mailbox) and has me go online to check my tax return. If I do nothing, they'll just send me any refund I'm owed (or expect my payment by the due date). If there is an error of any sort or I need to do something to it, I have that option. Many if not most people don't need to do anything, which saves money since there are less tax returns for humans to deal with. I'm guessing there are more resources available for other types collection efforts.

Thlom 4y ago
Banks are obligated to report the holdings you own, brokers are obligated to report both what you own and any gains/losses you have endured over the year, land and home ownership is also reported, many deductibles are reported (f.ex. daycare is a deductible and that is automatically reported). Basically most things are reported automatically and if there's anything else, like a long commute (which for some unknown reason is deductible), there is a simple form on the web site you can fill.
- iopq 4y ago
  But things like sales of crypto, overaseas earnings, business expenses, etc are not reported automatically Although I agree that the IRS can make a guess, I'd rather just change it to a system without so many damn details
  - toomuchtodo 4y ago
    Details aren't going away because tax policy is used to incentivize or disincentivize activities. Mandate reporting for what you can, provide an exception process when that isn't feasible. A majority of citizens can have their taxes done for them by the IRS, so do so.
  - godelski 4y ago
    > crypto Most people trade through brokers like Coinbase, which does report > overseas earnings I don't think this applies to the VAST majority people > business expenses Also doesn't apply to the vast majority of people.

godelski 4y ago

> However, there are cases when that estimate isn't correct. So I have a few important questions then: - How large is the error? - Can errors be solved by saying "confirm and if we find out you lied you'll pay a fine"? - Is the error homogeneous or worse for certain groups/classes? - Is the error less than the cost and loss of productivity that Americans face in filing taxes? - If it is non-homogeneous, then can we do return free filing for the majority of the population? - Why can other countries successfully perform this but we can't?